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Some signs of financial distress for Ohio residents, Part 2

In the last post, this blog began a discussion of some of the warning signs that individuals, or couples in a Cincinnati household may be heading toward financial distress. Many individuals have a tendency to overlook the signs as the months pass by. In the long run, overlooking the signs may only delay the inevitable as creditors become more aggressive. In other cases, overlooking the signs early in the game may only result in financial distress that could have been avoided.

For Ohio residents under severe financial distress, a Cincinnati bankruptcy attorney can evaluate an individual situation to allow a consumer to make informed decisions about getting control of their debt.

Last time, the discussion covered household disputes over finances and regularly occurring overdraft fees as potential warning signs of financial distress. However, a number of other signs are important in evaluating individual finances.

Late fees.

Late fees can accrue when bills are not paid on time. Some people just are not managing their time and are essentially throwing away money on late fees. However, individuals who are having difficulty making ends meet often juggle bills. Choosing between competing debts to keep services flowing can often result in late fees. Juggling bills can at times have the effect of worsening debt as late fees add to the overall debt and the overall debt balance grows.

Rising credit card debt

Some consumers use multiple credit cards to cover expenses, such as gas and groceries. The difficulty can arise when a consumer pays only the minimum payment on multiple credit cards. Balances can continue to rise and a missed payment or two could cause the interest rate to jump. Consequently the minimum payment goes up to cover the increased interest, leaving the consumer in greater distress.

Zero savings

Finances can be placed into an unstable state if there is no money available for savings each month. Unexpected car repairs, home repairs or an interruption in income can quickly change the tide if a household has no savings.

Home equity credit

Repeated use of home equity credit can have drawbacks on a household budget. The debt is secured by the house and amortized over a number of years. Home equity loans can be useful tools for some financial reasons, but many may head toward financial distress. This is especially true as the housing market continues to struggle and homeowners can become underwater on the secured home loan debts.

Source: Fox Business, "Eight Signs You're Flirting With Financial Ruin," 8 Jun 2011

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